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State approves $120M loan from Barclays to bankrupt Detroit

The city of Detroit took another step on its path to get out of bankruptcy with the unanimous approval Tuesday by the Local Emergency Financial Assistance Loan Board of a $120 million loan from Barclays.

At a meeting in Lansing, the three-member board quickly approved the loan, which is to be used for infrastructure improvements.

The board includes the state treasurer, the director of the Department of Technology, Management, and Budget, and the director of the Department of Licensing and Regulatory Affairs, or their designees.

The loan was submitted to the board by Detroit’s Emergency Manager Kevyn Orr. The city council had approved it previously on March 14th. U.S. Bankruptcy Judge Steven Rhodes has to approve of the loan; the issue will come before him at a hearing on April 2.

Rhodes had previously rejected the city’s plan for a $350 million loan from Barclays that would have been used to terminate payment to the city’s swap contract holders

“This transaction, if it is approved by the bankruptcy court, will provide significant financial resources to for the city to invest in restructuring initiatives and help combat blight, improve public safety, and enhance the quality of services Detroit residents expect and deserve,” Gov. Rick Snyder said in a statement after the meeting.